Audit of Department of State Directorate of Defense Trade Controls Export Licensing Processes
US State Department Office of Inspector General
AUD-SI-19-07
Feb. 7, 2019
OIG found that DDTC did not implement sufficient internal controls to ensure that permanent export license applications included all required information as set forth in its standard operating procedures (SOP).

Specifically, Licensing Officers approved 20 of 21 applications (95 percent) reviewed despite the absence of required information, including 5 applications that should have been returned to the applicant without action. OIG also found that DDTC did not always provide Congress with certifications to ensure that proposed licenses met U.S. national security and foreign policy objectives. In addition, OIG found one instance in which the Licensing Officer did not have the authority to issue the license.

These deficiencies occurred because DDTC (a) permitted deviations from its SOPs and (b) has not trained Licensing Officers on updated procedures. If these deficiencies are not corrected, DDTC will have limited assurance that licenses issued meet U.S. national security and foreign policy objectives. (U ) In addition, of the 21 applications reviewed, OIG found a single instance in which DDTC did not seek the input of other Department bureaus and offices, as required.

The single exception was due to human error. However, during the audit, OIG learned of other instances in which Licensing Officers deviated from Department guidance and did not engage other Department bureaus in licensing decisions.

When Licensing Officers fail to engage Department bureaus and offices, Department officials who are most familiar with foreign policy issues specific to the countries or commodities to be exported cannot provide input in the licensing decision.

(U)OIG also found that DDTC appropriately vetted the end-use and end-user of exports associated with applications reviewed for this audit. However, during audit fieldwork, OIG observed an end-use/end-user check that was not conducted in accordance with guidance. This exception occurred, in part, because the Department does not have a standard training program for the overseas Foreign Service Officers who conduct the checks. Furthermore, staff rotations at post scan impact the timeliness of vetting. Without proper vetting, DDTC could fail to safeguard the integrity and security of defense articles.


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